This article is a guest contribution from Bespoke Investment Group.
the investment world was up in arms about weak top-line numbers this earnings season. IBM and TXN reported weaker-than-expected sales the prior evening, and market pundits were using those two reports to characterize the entire earnings season trend. We noted how misguided this reasoning was in a post yesterday, and we provided a chart to show that revenue numbers versus expectations this earnings season had actually been much stronger than average (73% beat rate vs. the historical average of 62%).
The market staged a positive turnaround late in the day yesterday, and after the close, Apple reported stronger than expected bottom and top-line numbers. Suddenly all was right in the world again. We haven't heard or read a mention about weak sales numbers this earnings season since.
But just as one day of bad earnings numbers doesn't make an earnings season trend, one day of good numbers doesn't either. If the market heads lower today and we get a weak report from a big company after the close, the tune will no doubt shift once again. These days, the market and the investors that drive it are all over the place.
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